Apple to make 20% fewer new model iPhones in 2018

Apple Inc (AAPL.O) expects to ship 80 million new model iPhones this year, down 20 per cent from what it had planned at the same time last year, Japanese financial daily Nikkei reported on Friday, citing industry sources.

The California-based firm has asked suppliers to make about 20 per cent fewer components for the three new iPhones it plans to launch in the second half of 2018.

This figure is compared to last year’s plans for its iPhone X and iPhone 8 models, the paper reported.

The report added to concerns that consumer passion for new editions of the iconic smartphones may be cooling after years of scorching growth.

Such cool off has sent shares in Apple and many of its major suppliers lower and weighing on global stock markets.

“This news needs to be viewed in the context of Apple probably being overly optimistic last year in relation to the prospects for its new phones.

It leaves it with excess inventory in the first part of this year,” Atlantic Equities analyst James Cordwell said.

“At least part of this lower order forecast probably relates to Apple just being a little more realistic.”

Apple did not immediately respond to a request for comment.

The company sold 217 million iPhones, including its older models, in the fiscal year ended Sept. 30. It does not break down the figures by model and is still manufacturing large numbers of earlier versions of the phone.

Some analysts said they already expected Apple to sell fewer phones this year than last as global demand for phones tightens and competitors eat into its sales.

The company sold 129.5 million iPhones in the past two quarters, little changed from the same period a year earlier.

Apple’s shares fell as much as two per cent on the report, while those in suppliers AMS (AMS.S) and Dialog Semi (DLGS.DE) sank six per cent and 4.1 percent, respectively.

Dialog’s shares had slumped 17 per cent last Friday after it said Apple would cut orders for its power-management chips by around 30 per cent this year.

U.S.-based supplier Advanced Micro Devices, Micron Technology Intel Broadcom Inc and Qualcomm Inc were all down between one per cent and four per cent.

Many analysts have observed the high price of the iPhone X – which sells for 1,000 dollars.

It is the first iPhone to sport a new design since the launch of the iPhone six in 2015 – is also muting demand for the flagship.

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” said one of four industry sources cited by the Nikkei Asian Review.

“For the three new models specifically, the total planned capacity could be up to 20 per cent fewer than last year’s orders.”

Top Apple analyst Ming-Chi Kuo said earlier this week that Apple might cut prices of new iPhones to debut later this year by as much as 300 dollars , according to several media reports.

Kuo said that Apple was likely to launch a 6.5-inch OLED “IPhone X Plus,” a second generation of iPhone X and an iPhone with a 6.1 inch screen.(Reuters/NAN)